Hero Honda in fast lane.
hero-group.com
Wednesday, April 7, 1999
HERO HONDA
Last traded on: 07/04/99, %change over previos close: 2.98%
Exg.Code Open High Low Close Vol. Value (Rs)
B 182 791.5 809 780 794 152954 120725552
N 775.10 806.2 775.10 795.20 n/a n/a
Hero Honda sales seen at Rs 1,500 cr
Our Corporate Bureau
New Delhi, Apr 6: Riding on the immense popularity of its motorcycles, Hero Honda Motors Limited is all set to record a 34 per cent surge in turnover during 1998-99 to touch Rs 1,500 crore.
The company has achieved record sales of 5,30,000 motorcycles during the 1998-99 fiscal, registering a 30 per cent surge over the previous fiscal, a statement issued here on Tuesday said.
With this, the cumulative sales of its bikes crossed the 2.5 million mark. It is, in fact, the first motorcycle manufacturer in the country to have achieved this feat.
HHML's market share also increased from 36 per cent to 38 per cent during the period. Riding on immense popularity, its Splendor model has become the largest selling model in the country. In addition, Hero Honda's original model -- CD 100 -- also crossed the million mark last month.
According to HHML chairman and managing director Brijmohan Lall Munjal, ''We are developing the capability to respond, in the shortest possible time, to market needs. We are expandingour capacities at the Gurgaon plant and maintained a high level of productivity at Dharuvera plant to meet the increasing demand for our products.''
Riding the two-wheeler boom, its domestic sales, at present, is in the excess of 50,000 units per month.
Having created a leadership position in the 100cc category market, Hero Honda is now foraying into the 156cc category with the CBZ.
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Profile
Hero Honda Motors Ltd (HHL) is India's largest manufacturer of 100cc motorcycles (36% market share), the most rapidly growing segment of the two-wheeler industry. The company is a JV between the Hero Group (Munjals) and Honda, Japan. Its fuel-efficient motorcycles, strong brand name, wide distribution network, and alliance with Honda give HHL a unique competitive advantage. During FY98, HHL benefitted largely from the upswing in the 2 wheeler segment, and has infact outperformed it to post a 52% surge in volumes, that led to a 51% rise in profitability. The company consolidated its market share by 8.5% during the year. Exports at 18,408 motorcycles, posted a 22% increase over FY97. The company exported to new markets like Bolivia, Ecuador, El Salvador, and Jamaica, in addition to the existing markets of Ghana, Venezuela, Columbia, Sri Lanka and Argentina. Street, the step through model introduced last year, has not gained wide acceptance in India mainly on account of the high price factor. However, the model has done well in other Asian markets and it now constitutes 10% of the company's production and sales. Its other models viz, Splendor accounted for 36% of sales, CD100SS(28%), CD100(24%) and Sleek(2%). The technical collaboration with Honda, which was renewed till 2005 will facilitate introduction of new models over the years. The company's vehicles already meet the stringent year 2000 emission norms, which will enable HHL to save valuable transition costs. HHL plans to introduce a 150cc model by the end of FY98, which marks its entry in the non-100cc category
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Shareholding
Indian promoters : 29.0 %
Foreign collaborators : 26.0 %
Indian inst/Mut Fund : 11.0 %
FII's : 18.0 %
Public/Free float : 16.0 %
No. of shareholders : 42,139
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Equity Share Data
No. of Months 12 12 12
Year Ending 31/03/96 31/03/97 31/03/98
High Rs 300 360 976
Low Rs 185 225 309
Sales per share Rs 316.5 384.5 575.4
Earnings per share Rs 13.2 25.0 38.0
Cash flow per share Rs 18.5 31.6 47.4
Dividends per share Rs 3.20 3.50 4.00
Dividend yield % 1.1 1.0 0.4
Book value per share Rs 47.2 66.6 101.6
Shares outstanding (eoy) mn 19.97 19.97 19.97
Bonus/Rights/Conversions - - -
Price/Sales ratio x 0.9 0.9 1.7
P/E ratio x 22.8 14.4 25.7
P/CF ratio x 16.2 11.4 20.6
Price/Book value x 6.4 5.4 9.6
Dividend payout % 24.3 14.0 10.5
Mkt Cap Rs mn 5,991 7,189 19,491
No. of employees 000 4 4 5
Total wages & salary Rs mn 269 344 492
Sales/employee Rs Th 1,560.5 1,806.8 2,553.6
Wages/employee Rs Th 66.4 80.9 109.3
Net profit/employee Rs Th 64.9 117.6 168.4
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Income Data
No. of Months 12 12 12
Year Ending 31/03/96 31/03/97 31/03/98
Gross sales Rs mn 6,320 7,679 11,491
Other income Rs mn 102 149 117
Total revenues Rs mn 6,422 7,828 11,608
Gross profit Rs mn 585 870 1,362
Depreciation Rs mn 107 132 188
Interest Rs mn 59 87 79
Profit before tax Rs mn 419 651 1,095
Tax Rs mn 156 151 337
Profit after tax Rs mn 263 500 758
Gross profit margin % 9.3 11.3 11.9
Effective tax rate % 37.2 23.2 30.8
Net profit margin % 4.2 6.5 6.6
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Balance Sheet Data
No. of Months 12 12 12
Year Ending 31/03/96 31/03/97 31/03/98
Current assets Rs mn 1,220 1,622 2,048
Current liabilities Rs mn 976 1,440 1,560
Net working cap to sales % 3.9 2.4 4.2
Current ratio x 1.3 1.1 1.3
Inventory turnover ratio Days 35 32 29
Debtors turnover ratio Days 11 13 10
Net fixed assets Rs mn 1,020 1,962 2,153
Share capital Rs mn 200 200 200
"Free" reserves Rs mn 730 1,153 1,854
Net worth Rs mn 942 1,331 2,029
Long term debt Rs mn 201 820 868
Total assets Rs mn 2,597 3,953 4,606
Interest coverage x 8.1 8.5 14.9
Debt to equity ratio x 0.2 0.6 0.4
Sales to assets ratio x 2.4 1.9 2.5
Return on assets % 10.1 12.6 16.5
Return on equity % 27.9 37.6 37.4
Return on capital % 28.2 27.3 28.9
Exports (fob) Rs mn 344 495 592
Imports (cif) Rs mn 595 1,198 1,127
Exports to sales % 5.4 6.4 5.2
Imports to sales % 9.4 15.6 9.8
Fx inflow Rs mn 356 504 613
Fx outflow Rs mn 688 1,336 1,300
Net fx Rs mn -332 -832 -687
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